Arotech acquires UEC Electronics for $28m

Arotech borrowed $22.5 million to finance the acquisition.

Defense company Arotech Corporation (Nasdaq: ARTX) has acquired UEC Electronics LLC of South Carolina for $28 million, 775,000 Arotech shares, currently worth $4.82 million, and up to $5.5 million in milestone payments over two years. Arotech will integrate it into Arotech's Battery and Power Systems Division.

Arotech had just $6 million in cash at the end of 2013, and borrowed $22.5 million to finance the acquisition. $18 million of loan carries a 2014 rate of LIBOR plus 3.75% and $4.5 million carries a 2014 rate of LIBOR plus 5.5%. The company plans to repay the loan over over the next five years out of its operating cash flow.

Following the acquisition, Arotech revised its 2014 guidance to earnings before interest, taxes, depreciation and amortization (EBITDA) of $8-8.5 million on $117-123 million revenue.

UEC develops and manufactures electronic components and subsystems primarily for military, aerospace and industrial customers. It specializes in core, proprietary engineering capabilities in highly-demanded solution areas, including hybrid power generation systems, smart power subsystems for military vehicles and dismounted applications, and aircraft and missile systems support for cutting-edge weapons and communications technologies. Its customers include the Marine Corps, Space and Naval Warfare Systems Command, and the Tank Automotive Command, as well as Raytheon Company (NYSE: RTN), Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT) and BAE Systems plc (LSE: BA).

Published by Globes [online], Israel business news - - on April 2, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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